Sinopec, the Chinese
state-owned petrochemical and oil major, and Swiss chemical conglomerate Ineos
are reportedly on the verge of settling a patents-related dispute over
acrylonitrile, an industrial chemical. According to a recent report in the
Financial Times, the companies could soon find a solution as they have been in
several rounds of discussions to resolve the dispute. According to the CEO of
Ineos, Jim Ratcliffe, the two companies will soon find a resolution based on
their good understanding and relationship.

Ineos had filed a
lawsuit against Sinopec in March last year, after the latter’s subsidiary,
Ningbo Engineering, allegedly breached an agreement between the two chemical
giants to develop new acrylonitrile manufacturing plants without the consent of
the Ineos. With Ningbo Engineering having allegedly broken this technology
agreement, Ineos filed a lawsuit.

Acrylonitrile is an
important chemical for a myriad of industries such as aerospace, automotive,
and a variety of defense-industry-related machines and equipment. This makes
acrylonitrile a high-demand chemical and one that also brings in appreciable
revenue.

In its lawsuit, Ineos
had claimed that the industrial chemical is a core part of its business and
that with the breach of the technology agreement by Ningbo Engineering, the
former could face a loss of revenue. According to Ineos, its acrylonitrile
business brings in revenues to the tune of US$500 million annually. Ineos runs
chemicals businesses across Europe and the U.S., and has a replacement value of
US$3 billion. It employs about 5,000 people.

Ineos also said that
the key value and competitive advantage of a business like it depends on the
use of intellectual property, including but not limited to: Patents and trade
secrets. Ratcliffe said that unless Ineos protects these pillars of its
business, it will eventually meet its demise. In the backdrop of this dispute,
the two companies have frozen their JV to build a Nanjing-based phenol plant.